Office of Standards & Compliance; Public servants prohibited from doing business with state; Financial Disclosure Framework: progress reports; with Deputy Minister

Public Service and Administration, Performance Monitoring and Evaluation

20 November 2019
Chairperson: Mr T James (ANC)
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Meeting Summary

The Public Service Commission said that the main objectives of the Financial Disclosure Framework (FDF) were to manage conflicts of interest in the public service and to promote ethical conduct, accountability and transparency in line with constitutional values and principles. A conflict of interest occurred when a company to which a government official was linked, was conducting or had conducted business with an organ of state.

The PSC said it was experiencing challenges with certain executive authorities (EAs) who had not been providing feedback on actions taken regarding non-compliance with the Framework. It acknowledged that this was due to its lack of power to enforce its recommendations, and Members suggested that non-performing EA’s should be named and shamed and brought to the Committee to account for their non-compliance.

The Department of Public Service and Administration (DPSA) reported that at the end of March 2018, National Treasury had found 15 070 public service employees registered on the Central Supplier Database (CSD) -- 10 315 from the provinces and 4 755 from national departments.Of the 15 070, 679 employees were actually conducting business with an organ of state -- 183 from national departments and 496 from provincial departments.

Members asked about the measures in place with to deal with conflicts of interest where the spouses of public servants were doing business with the state; how the DPSA could improve its ability to prosecute, because the problem seemed to be increasing; what the rationale for requiring personnel to disclose their interests was when there was already a prohibition in place; and what categories of work were exempted to avoid unintended consequences.

The Department explained the purpose behind the establishment of the Office of Standards and Compliance (OSC) and the Public Administration Ethics, Integrity and Disciplinary Technical Assistance Unit (TAU), and the alignment between the two bodies with the Sixth Administration’s priority areas. A challenge was that the operationalisation of the OSC and TAU happened in the middle of a financial year, when budgets had already been allocated, which would limit the scope of their initial operations.

Members questioned whether the cost and time to deliver a service had been determined in the norms and standards for the OSC to certify that services had been delivered on time and within budget; would this evaluation be included in the annual reports of departments; would the Office go on-site for inspections, or would it rely on desktop information and reports from the departments and municipalities as to whether they had complied with the standards; what action would the OSC take when it saw a department was falling short; would its monitoring and evaluation not duplicate the work of the Department of Performance Monitoring and Evaluation?

The report of the Committee on the recommended candidate for appointment by the President to serve as a Commissioner for the PSC was adopted.

Meeting report

Public Service Commission: Financial Disclosure Framework

Mr Michel Seloane, Commissioner, Public Service Commission (PSC), said the objectives of the Financial Disclosure Framework (FDF) were to manage conflicts of interest in the Public Service, with the overall goal of promoting ethical conduct, accountability and transparency in line with constitutional values and principles

He referred to the regulatory framework and the role players, and said the details of interest to be disclosed included shares, equity, loan accounts, other financial interests, income generating assets, trusts, directorships and partnerships, other remunerative work, consultancies and retainerships, sponsorships, gifts and hospitality, immovable property and vehicles.

Actual conflict of interest involved a direct conflict between a public service official’s current duties and responsibilities, and the existing private interest. It was an impermissible conflict between the relevant public interest that a public official had a duty to protect, and their own personal interest. It occurred where a company to which an official was linked, was conducting or had conducted business with an organ of state. This phenomenon was also a contravention of Regulation 13(c) of the Public Service Relations (PSR), 2016.

In terms of Regulation 21(1) (e) of the PSR, 2016, executive authorities (EAs) were expected to inform the PSC of the steps taken following the PSC’s findings. If any steps were taken, EAs were supposed to provide a description of those steps, otherwise they must provide the reasons for not taking any action. Some EAs had not been providing feedback to the PSC on actions taken regarding non-compliance with the framework.

Key findings and recommendations had identified non-compliance with the requirement to submit financial disclosure forms, actual and potential conflicts of interest, gifts and sponsorships, other remunerative work outside the employees’ work in the public service, and a lack of capacity in departments to administer the financial disclosure framework.

Mr Seloane described some of the challenges experienced by the PSC. Currently, it relied on the eDisclosure system and databases of other institutions to access the data it needed to conduct an effective scrutiny of the financial disclosure forms. In its current state, the eDisclosure system did not have built-in business intelligence to enable automatic verification and generation of scrutiny reports. For this to happen, it would require interface with other systems such as Basic Accounting System (BAS), the Personnel Administration System (PERSAL), the Companies and Intellectual Property Commission (CIPC), and the Deeds Office.

Parliament needed to impress upon the EAs the significance of the framework, and why they should cooperate with the PSC in its endeavour to improve its monitoring of the implementation of the framework.

The above-mentioned challenges left the PSC with the option of designing a system which was separate from the eDisclosure system, that could conduct the verification of financial disclosures and generate reports. For this to succeed, it needed financial support from the EAs responsible for the institutions whose databases were crucial for the automation of the scrutiny function. The political buy-in should guarantee, among other things, free access within the confines of the law to relevant data that was stored on the databases of these institutions.

Deputy Minister’s preview

Ms Sindi Chikunga, Deputy Minister, Department of Public Service and Administration (DPSA), said the Department would present on the implementation of the revised determination of other remunerative work that would prohibit public servants from doing business with the state.

Members would be aware that the Public Service Regulation of 2016 states that an employee shall not conduct business with any organ of state or be a director of a public/private company conducting business with an organ of state, unless such employee was in an official capacity as a director of a company listed in schedule two and three of the Public Finance Management Act. In this regard, the DPSA would provide the Committee with the statistics and figures on whether the DPSA was making any progress in that area.

In keeping with the amendments to the regulations, the DPSA had informed the departments about the application of these regulations to special advisors of ministers and public administration employees, and that contravention of this prohibition was now a crime. There were names that had been identified, and she confirmed that they may have actually been handed over to the South African Police Service (SAPS). The Director-General would explain that just this year the DPSA, together with the SAPS and the National Prosecuting Authority (NPA), had met to discuss progress on these issues, the details of which would be covered in the presentation.

The Deputy Minister handed over to Mr Richard Levin (Director-General DPSA) and said that he would present how the DPSA had done in this regard and how the departments were complying with the regulations and what the way forward is.

Implementation of revised determination on other remunerative work

Mr Richard Levin, Director General (DG): DPSA, introduced himself and said that in 2013 he had been with the PSC as DG and the issue of banning or imposing a ban or prohibition on public servants doing business with the state had been raised. This, in a sense, talked to the journey that had been undertaken on the implementation of that particular idea through the legislation that would be discussed, and the DPSA’s attempts to implement consequence management through a partnership with the law enforcement agencies in South Africa.

Providing background, he said that in September 2018, the DPSA had presented the following statistics:

  • In February 2017, National Treasury (NT) had found 8 495 public service employees to be registered on the central supplier database (CSD) -- 5 366 from the provinces and 3 129 from national departments.  From the 8 495 public service employees listed, 580 employees were actually conducting business with an organ of state. 
  • At the end of March 2018, NT had found 15 070 public service employees to be registered on the CSD -- 10 315 from the provinces and 4 755 from national departments.  From the 15 070 public service employees listed, 679 employees were actually conducting business with an organ of state -- 183 from national departments and 496 from provincial departments.
  • The DPSA reported that 20 departments (ten provincial and ten national) provided progress reports to the DPSA by the end of August 2018, and a further two by September 2018.
  • The Portfolio Committee had requested the names of identified employees and their departments from the DPSA so as to address their non-compliance.  This had been provided in December 2018.

The presentation touched on the measures put in place, and the status of regulation 13 (c).

Mr Levin said that by 31 March 2018, more correspondence was received, where eight more departments had reported. These were the Departments of Telecommunications & Postal Services, Government Communication and Information Systems, Tourism, Trade and Industry, Science and Technology, the DPSA, Eastern Cape Safety & Liaison, and the Department of Human Settlements. One had asked for an extension – the Western Cape provincial department – and in July 2018 a comprehensive update was provided. Another two had provided information at the end of September 2018 -- the Western Cape Departments of Human Settlements and Health. Very few reported outcomes of investigations or informed employees registered on the CSD to deregister.

Regarding the way forward, from May 2019, the DPSA hadstarted to verify the identified names with their relevant departments to ensure they were still employed, correctly flagged and conducting business with the state.  Those confirmed would be handed over in batches to the SAPS and National Prosecuting Authority (NPA) for investigation and prosecution.

On 24 June, the first 20 public service employees who were conducting business with the state had been handed over to the SAPS and the NPA for further investigation and prosecution.

On 2 September, SAPS and the had DPSA convened a meeting to discuss progress on these cases, and it had been resolved that the NPA would be included in the next meeting to develop prosecution strategies.The DPSA was also in the process of finalising another 20 names of employees to be handed over to the SAPS before the end of November 2019.

Discussion

Ms M Clarke (DA) said she would be looking at both reports. Firstly, when looking at the PSC report and the budget and operational needs they were having to grapple with to do their jobs, it seemed that in every report that was presented to the Committee, these were the problems that they experienced. They did all the good work but there were no results from it because they had budgetary problems. Their powers were also not in place in order to make a concerted effort. This was something the Committee would have to debate and consider how it could be fixed.

Secondly, when looking at the financial disclosures, the heads of departments (HoDs) were the biggest problems. They could not show great leadership in their teams if they were the ones who were the great offenders – they were the ones supposed to take action against staff that conducted business with the state. If they were not making their own financial disclosures, this report clearly indicated they were also not following through with what they should be doing. HoDs who were not dealing with these issues should be summoned to the Committee and told that they had to do so.  

She would like to see a report on officials doing business with the state. SAPS should present such a report to the Committee so that it was clear that these issues were actually being dealt with. There were many instances where lifestyle audits should be done, but were not being done. There were officials in the provinces that earned a certain amount of money per month, and had four or five houses where their bonds exceeded their earnings, and enjoyed an unbelievably high lifestyle. Another issue that had to be looked at was how spouses could be prevented from getting contracts through the state, with the employees of those spouses benefiting in any case.

Mr S Malatsi (DA) said there was a part of the presentation that made reference to Executive Authorities being advised to take action against the highlighted officials. However, there was no indication whether this was done and followed up to establish whether eventually the advice was implemented or not, given that there was deviation from the legislation. The other aspect to consider, if it was not in the current legislative dispensation, was whether incentives should payable to officials who had not completed the process of financial disclosures. One should not be rewarding unethical behaviour.

Dr L Schreiber (DA) said it appeared that there had been an increase in the number of public servants doing business with the state, from 798 to 1068, which was about a 33% increase. However, only 20 had been referred for prosecution and investigation, which represented only 1.8% of all public servants doing business with the state.  There was a question as to how one could ramp up the ability to prosecute while the problem seemed to be growing.

Mr B Maneli (ANC) referred to the increase in the number of employees doing business with the state, and queried to what extent there was repetition – that perhaps they were the same people who were there in the previous years, but were still appearing on the central database. There was already legislation prohibiting this from happening, and so action must be taken so that the Committee could establish whether these were a new set of employees, or whether it was a repetition of the same people and nothing had been done to deal with them. He suggested new employees may simply be unaware of the legislation, rather than it just being a case of lawlessness.

The Committee had just come through the budgetary review and recommendations report (BRRR) process, where issues of irregular expenditure had been raised. It may also be interesting to check whether companies that were involved in irregular, fruitless and wasteful expenditure were also linked to officials who may be doing business with the state.

Ms B Maluleke (ANC) welcomed both presentations. Clarity was needed on the fact that it was said that the financial disclosure framework (FDF) seeks to prohibit employees from doing business with state entities, but then it was also said that the employees had to disclose if they were doing so,  which suggested it was a contradiction. Why was it stated that employees must disclose when there was already prohibition on them conducting business with the state? Since some of the Executive Authorities had not provided feedback to the PSC on action taken with regard to non-compliance with the framework, what was being done to ensure that they would report back to the PSC in future?

Ms M Kibi (ANC) said that if officials were found to be having business with the state, and were they asked to remove the potential conflict of interest, did they resign from public service or from business where there was potential conflict of interest? Who followed up to ensure either of these two steps had been taken? There was a question on how a gratification gift was determined -- whether it was given in good faith or whether it was solicited to influence some business decisions or preferences. Within the DPSA, how many employees were conducting business with the state and were registered on the CSD? 

DPSA’s response

Deputy Minister Chikunga said that under normal circumstances, one would expect that a person who got employed in a department would be orientated for a week, or even more than that. This would include disciplinary processes, grievances procedures, the department itself and how it works, and the work that the person would be expected to do. During the course of the year, there would be branch meetings, for instance, with the Director-General calling the staff and reminding them about these things and checking whether they were done, and whether people were complying.

When people were disciplined, there were two approaches. The one was that it was a criminal offence, and the other that it was a disciplinary case within the department which must be followed. People that get employed in the public service had to undergo orientation with the National School of Government (NSG), where such matters had to be covered so they understood the basic things that could actually lure them into jail. Doing business with the state was both a disciplinary and a criminal matter, and the two processes therefore had to be followed internally and externally. If this did not happen, it left room for questions as to whether the DPSA was managing these things effectively before they get out of hand.

The DPSA acknowledged the issues regarding the budget that were being raised, particularly those involving the PSC. It was a challenge, but it was understood that as from next year the PSC was going to get its own vote, so it was no longer going to be via the DPSA, which would strengthen the PSC’s independence even more.

Mr Levin said that the challenges of resources for the PSC were also challenges to the DPSA in terms of the resources it could muster for what it needed to do to fulfil its mandate. Clearly the questions were observing the trends, and the trends were worrisome.

Referring to lifestyle audits, he said the draft regulations that the DPSA would be gazetting for public comment shortly included a specific regulation that dealt with unexplained wealth, which would then be the trigger for the lifestyle audit. In all these matters, the DPSA had to deal with the Protection of Personal Information Act (POPIA) and the provisions in the Constitution which provide for all South Africans to engage in trade. That was where the challenges arise, such as the questions around the extension to spouses, which was in the legislation in terms of the declaration. There were a lot of constitutional challenges that would arise through the implementation of that. Nevertheless, the DPSA would go ahead and formulate regulations and extend the declaration of interest to spouses and other family relatives where relevant, but it would be considered a fraud process because of the Bill of Rights.

He commented that ethical questions were not exclusive to South Africa, or a particular province. Ethical questions were being grappled with all around the world by bodies such as the Organisation for Economic Co-operation and Development (OECD). The biggest challenge with governments today was public trust. To address this concern, a number of interventions were conducted on an on-going basis around education and creating awareness. Every public servant that came into the system had to go through an induction programme in which ethical issues were raised. In the Senior Management Service (SMS) induction in particular, the need to disclose and why was covered. A lot of work on promoting integrity had been done in the department, and last year the Cabinet also took the decision to make an online ethics course compulsory for all public servants. That online course was developed in partnership with the DPSA and the NSG.

The observation was correct that the problem was growing, and determining exactly how much it was growing was also a function of understanding the extent to which detection was improving. The ability to detect through the various frameworks was gaining traction within the public service. However, the role of leadership was fundamental -- leading by example was really critical when it came to winning this particular battle.

The Financial Disclosures Act had been in place for many years. There was an anti-corruption conference during Nelson Mandela’s administration, and that was when the PSC became active in developing a financial disclosure system which ultimately became an online system managed by the DPSA. Over the years, a lot of steps that had been taken while the problem had deepened, but the measures that were put in place now were much stronger and more robust. Hopefully, through the current process with SAPS and the NPA, the tide can be turned.

In order to understand compliance issues, the decentralised nature of public administration needed to be considered. If one read the Public Service Act, there were overarching powers for the Minister with regard to public service and administration. However, on a unit per unit basis, it was the Minister and the provincial Members of Executive Councils (MECs) who hold the original powers of administration, and these were then delegated to a head of department (HoD), and in turn from an HoD down to other senior managers. In terms of the feedback from EAs, that was a challenge for the PSC, as well as for the DPSA, in order to try and enforce the frameworks for financial disclosure.

It was increasingly being said that with the establishment of the Public Administration Ethics Integrity and Disciplinary Technical Assistance Unit, the DPSA would have to move into the area of enforcement, and that would constitute a shift from the way in which the Department had been functioning in the past.

Mr Levin said one could conduct an analysis around the extent to which indebtedness this was a contributing factor. Studies had been done on levels of indebtedness which showed that public servants, like many other South Africans, were highly indebted so they were then susceptible to taking bribes. This was something that needed to be taken into account. One could conduct a broader analysis of possible causes of corruption as well. This would relate to the larger political economy and the extent to which society was being transformed, the extent to which the private sector was being transformed, and the extent to which these were contributing factors to the kind of contract practices that had been witnessed over the last decade or so. Those were certainly factors to take into account when one was trying to deal with the immense problems of professional ethics and corruption.

Dr Salomon Hoogenraad, Director: Ethics Management, DPSA, said that as at April 2019, there was no person in the DPSA on the CSD who was conducting business with the state. Because this was such a serious issue after April 2019, when it became a criminal offence, a number of preventative measures had been put in place to guide public servants so that they understood if they remained on the CSD, it would become problematic. A number of circulars were issued, and a lot of correspondence was addressed to the HoDs.

The DPSA also worked through the National Ethics Officer Forums, of which there had been five already. It was an annual forum where the issue of the gifts, other remunerative work, financial disclosures, and all the conflicts of interest issues were addressed. The Ethics Officers went through that process to make them understand that they should go back to their departments and explain to the officials the gravity of being registered on the CSD. The DPSA had also drafted numerous toolkits, with questions and answers on other remunerative work and doing business with the state. Other measures were the two directives that had been published to guide people, monitoring on the implementation of the guides, and the publication of yearly monitor reports to see whether there was improvement or not. The DPSA also published guides on gifts and other remunerative work, and was currently busy with one on conducting business with the state.

The most effective tool was the online code of conduct that had been launched in 2017. To date, 10 000 public servants had voluntary enrolled and completed the course where the DPSA deals in depth with what a gift is, what other remunerative work is, what the relationship between other remunerative work and conducting business with the state was and why one cannot conduct business with the state.

Although there were a number of preventative measures, it was not enough. After April, this was a criminal offence, so examples of offenders needed to be made.  Not all of the 1 068 people identified had been doing business with the state, so they needed to be individually investigated to ensure there had not been false flagging. It had already been found now that there were almost 30 names that were found on the list submitted to SAPS that were not really conducting business with the state, so it was a tedious process to go through. The DPSA had already handed in another 20 names to SAPS and the NPA to look at how to come up with a prosecution strategy for this.

Looking at the ten activities excluded, the regulations had an unintentional consequence where there were officials marking examination papers for the University of SA (UNISA), for example, or were contributing to knowledge building, and were then suddenly found to be conducting business with the state. That was not the intention, so those activities had then been excluded because they were not taken as doing business with the state. The police and military reservists were also excluded to avoid the unintended consequences of people who were doing after hours services to the country being found to be conducting business with an organ of state. Others excluded were health officials who had specific skills issuing certificates of disabilities -- if this was stopped immediately it would have a serious impact on service delivery for the SA Social Security Agency (SASSA).  There were also activities around professional development -- veterinary students who had go to Onderstepoort and do work there would be deemed to be conducting business with the state.

To prevent abuse of the system, the regulations state that if one wants carry out any of those functions involving remuneration, one had to apply so it could be screened and ensure there was no conflict of interest. If there was a conflict of interest, then one would not be allowed to do so.

Mr Seloane said that it was important to show the sequence of events. The Financial Disclosure Framework had existed long before the Public Administration Management (PAM) Act, which was signed into law in April, and initially non-disclosure, or conducting business with the state, were only viewed as misconduct.  One of the PSC recommendations had been that conducting business with the state must be prohibited, and this had been captured in the PAM Act. Now offenders would have to explain themselves in a court of law, so there would be that discouragement.

Mr Tshepo Matlhare, Public Service Commission, said on an annual basis the PSC develops a report called an overview report on the implementation of the FDF, and part of this report indicated the extent to which EAs had complied with the requirement to provide feedback to the PSC. Statistics from 2016/17 showed that in national departments, the PSC had expected 34 EAs to provide feedback, and only six had complied. In the provinces, the number was 111, and feedback was provided by only 64, but in the latest report only 53 EAs had provided feedback to the PSC. The figures for individual provinces were:

  • Western Cape: 12 EAs -- ten provided feedback;
  • North West: 11 EAs -- two provided feedback;
  • Northern Cape: 11 EAs – one provided feedback;
  • Mpumalanga: All EAs provided feedback:
  • Limpopo: 11 EAs -- one provided feedback;
  • Gauteng: All EAs provided feedback;
  • Free State:11 EAs -- six provided feedback;
  • Eastern Cape: 12 EAs -- one provided feedback.

 

The feedback that was expected was based on the findings that the PSC had made on potential conflict of interest and, in certain instances, actual conflict of interest. Where there were findings about specific officials in those departments, the EA had to consult with the official to check the extent of the involvement of the official in a company, what it was they were doing and whether the potential conflict of interest may end up becoming an actual conflict of interest, and how it was managed. The recommendation that PSC made, especially where there was an actual conflict of interest, would be based on how that conflict would be removed if it was actual conflict and if it was potential, how it would be managed so that it did not become an actual conflict of interest. Removing the conflict of interest meant that the person must either resign from the company that caused the conflict of interest, or resign their position. Feedback as to whether any action had been taken was needed, and if any action had been taken, what the actions were. If no action had been taken, what were the reasons, because maybe during the discussions or investigations the department might find that there was no conflict of interest. However, the feedback was still needed to see if the recommendations had been considered and implemented.

Discussion

Mr Maneli said there was a technicality raised regarding actually doing business with the state and not doing business with the state. If the principle was prohibition, it meant that once one registered on the CSD one was making one’s intention clear one wanted to do business with government, or the state and its state organs, so whether one actually had a contract that was running or not at that point was another issue. This was being raised because even on the audit side, there was always the problem that irregular expenditure did not necessarily mean that value had not been received from the services rendered. Sanctions should be imposed to ensure the correct processes were followed, as the overall purpose was to prohibit employees from doing business with the state, and once they were on the CSD, they were making their intentions clear that they want to get involved. It was important to have this understanding -- the fact that they were on the CSD says that there was an intention.

Mr Seloane responded that with regard to the issue of ‘potential’ versus ‘actual,’ in the PAM Act, ‘actual’ was now a criminal offence, and with regard to ‘potential,’ there had been a directive that had been issued by the Minister in 2017to close that gap. All the officials who had companies which were on the CSD had to resign from those companies, and the gap was closed. No official could now continue to be on the CSD. The directive closed that gap -- there was no way now of conducting business with the state, whether potential or actual.

Ms Maluleke said if a person was being prohibited but that person was also allowed to do something else, then there was a contradiction. What measures were in place to ensure that EAs gave the PSC the feedback reports?

Mr Matlhare said the PSC first writes to the EAs to submit the individual departmental report, and then liaises with the Ethics Officers to follow up and make sure that their EAs act on the reports and provide the feedback. The Commissioner of the PSC met every now and then with the EAs and the issues of feedback were also discussed. However, the PSC still found that it quite a challenge to receive feedback. It was often not forthcoming, and if it did it would come very late -- when the PSC had already published the overview report.

Dr Schreiber referred to the ‘potential,’ and the gap being closed, and said there were 17 700 public servants currently registered on the CSD, and this was despite the directive that had been sent out. In theory, it did close the gap, but in practice the 17 700 names were still there. Regarding the lack of feedback, it simply meant that the EAs did not respect the PSC because it did not really have the teeth and the power to take action against them. There was no doubt that if the PSC had the powers, they would act against people who continuously ignored them because there was a lot of respect for the PSC and the work that they did. However, the PSC was being held back legislatively if the Committee kept hearing the same issues over and over again.

Mr Malatsi said that, based on the responses, it was clear that there was a level of frustration that the PSC had regarding what its engagements with the EAs ultimately contributed to. The reports were needed, because they affected the accuracy of the information that the PSC had to submit at the end of the year. If there was missing information, while showed the trends, it would not give a true picture of the situation. While the process of initiating any legislative amendments would be the ideal goal, that would take a long time. However, there was scope to start raising the game in being decisive in dealing with lax EAs, perhaps through the publication of those departments and EAs that were not meeting their responsibility for submitting the documents so that it was publicly available. Ultimately, the Committee had to use the ‘stick’ approach so that behaviour could be changed so that it could get accurate information. The credibility of the information was important for any intervention measures that needed to be put in place to improve governance across the three spheres of government.

Mr Seloane said that PSC had already started a quarterly bulletin to highlight issues such as the 30-day payment of service providers, and an improvement had been noted since naming the non-complying departments.  The PSC could therefore consider publishing the details of the EAs who were not reporting. However, naming and shaming did not necessarily resolve the problem. It could be resolved if Parliament actually called those EAs to account because by ignoring the PSC, they inadvertently were ignoring Parliament. The PSC would indicate in their reports which EAs had complied and which had not.

Office of Standards and Compliance(OSC) & Public Administration Ethics, Integrity and Disciplinary Technical Assistance Unit (TAU)

Deputy Minister’s preview

Deputy Minister Chikunga said the DPSA had been requested to report on the progress made with the establishment of the Office of Standards and Compliance in the Public Service. Originally this office was named the Office of Standards in the Public Service, but was later legally named as the Office of Standards and Compliance, as per the PAM Act. The rationale for the creation of the then OSC concept had revolved primarily around the findings of non-compliance by the Auditor-General (AG) and the PSC, that there was an inability by government to successfully implement these programmes across the three spheres of government due to the lack of common norms and standards. In fulfilling the statutory mandate for the establishment of the OSC, the branch in the DPSA had analysed the key projects between December 2014 and November 2019 to ensure the establishment of the OSC. The projects would be outlined in the presentation. The OSC was currently incubated in the research and policy analysis branch within the DPSA.

OSC’s alignment with TAU

Mr Levin described the alignment of the OSC and the Public Administration Ethics, Integrity and Disciplinary Technical Assistance Unit (TAU to the 6th Administration’s priority areas, as outlined in the State of the Nation Address.

The OSC was required to submit reports to the Minister and the relevant head of institution, directing in that report, if necessary, steps to be taken by the head of institution to comply with the applicable minimum norms and standards, and assist the institution in taking those steps. It was also required to reportto the Minister at least once a year, or at the request of the Minister, on the performance of the Office’s functions, the effectiveness of the minimum norms and standards, or any other matter related to the Office’s functions which may be requested by the Minister.

Challenges and interim measures to operationalise the OSC and TAU included the fact that yhe operationalisation of the OSC and TAU happened in the middle of a financial year, when budgets had already been allocated. Based on the costed structures and operational requirements for the OSC and TAU, additional funding would have to be requested from National Treasury during the 2020 budget cycle. In the interim, the department would prioritise key posts that could be created and filled using the available compensation budgets, and operational budgets would be sourced from reprioritisation of existing allocated goods and services budgets of programmes/branches.

The way forward would involve:

  • Establishment of standards setting committees;
  • Public administration norms and standards (PANS) framework popularised;
  • Data management skills and capability enhanced; 
  • Functionality index developed;
  • Compliance measurement tools developed and piloted;
  • Early warning system implemented;
  • Performance Management and Development System (PMDS) must be linked to productivity measures;
  • Data quality assessment;
  • Progress on digital government must be accelerated; and
  • Establishment of a governance framework for OSC.

 

Discussion

Ms Kibi asked, when cost and time to deliver a service had been determined in terms of the norms and standards, whether the OSC would certify that such a service had been delivered on time and within budget, and if this evaluation be communicated in the annual report of a department being evaluated. Would the Office go on site for inspections, or would it rely on desktop information and reports from the departments and municipalities that had to comply with the standards. If so, would the capacity of the Office be sufficient to carry out this function for the entire public service?

Ms Motsepe asked what would happen in the case where an organisational functionality index indicated that a specific department or unit was falling short in meeting the standards of compliance, would the OSC recommend the retraining of personnel or the overhaul of the entire functional system affected? Would the office issue annual reports of departments and local government in the same manner as annual reports so that they could be used to interrogate the departments in the same way as annual reports were interrogated by Parliament?

Mr Maneli said there was an element of monitoring and evaluation involved, and the Committee also received a report from the PSC that also looked at some of those aspects. The question therefore was what the difference would be between what the OSC did as it related to that aspect of monitoring and evaluation compared with what the PSC did, so that this was not seen as duplication. How would the DPSA manage the reporting on norms and standards at the municipal level in particular, because it reported to the Minister of Public Service at a political level, but at a local government level the reporting was more to the Minister of Corporate Governance and Traditional Affairs. How would this be looked at with regard to issues involving levels of authority -- at what level would the head of this office be, and what skills and educational requisites were needed to get to that position?

Ms Clarke asked what the difference was between OSC, the DPME and the PSC. What were the different functions and how would they find synergy together in order to do evaluations?

Responses

Mr Levin said that ultimately the office would have the capacity to look at particular services. It would build that ability over time so it would be able to act as an early warning system for service delivery breakdowns in certain areas. It would use on-site as well as desktop research and analytical methodologies, but ultimately its ability to go on site or to have something which may approximate an inspectorate would be determined by the availability of funds. This would also determine its capacity for coverage of the entire public service.

The OSC would certainly make recommendations in its various reports, which obviously would take shape overtime. They would include annual reports which would give a global position on certain aspects which were across departments and sectors, as well as specific aspects which dealt with service delivery improvements in specific sectors.

Regarding the issue of duplication, the DPME was increasingly looking at monitoring and evaluating the implementation of the National Development Plan (NDP), so the medium term strategic framework (MTSF) being finalised by the Cabinet at the moment was very much focusing on NDP implementation. The work that was done through the Management Performance Assessment Tool (MPAT) was going to be transferred to the DPSA, but within a different framework through the OSC.

The PAM Act brought into effect the norms and standards for the entire public administration, which in their initial phases would be for national, provincial and local government. The issue of the authority of the head of the office would be finalised during the implementation of the new structure, where a job evaluation would need to be applied to this post, as well as the post which would lead the TAU on ethics, integrity and disciplinary management support.

With the PSC, there would need to be discussions going forward in terms of making sure that there was no duplication. The PSC was an independent constitutional body, which meant it would take its decisions independently on exactly the kind of work it would do. work plans and so forth. In practical reality, it would be desirable if there could be a better understanding to minimise duplication between the OSC on the one hand and the PSC on the other.

Ms Colette Clarke, Deputy Director General (DDG): DPSA, referred to the instruments that the DPSA had designed from the existing legal frameworks, and also the authority that had been conferred on particular constitutional bodies like the PSC. She explained that just as National Treasury had to set the generally recognised accounting practices within its own realm, they had the Office of Accountant General which was separate from the Auditor-General, and the relationship between their two offices was very clearly defined.  Whether one had the Public Financial Management Act (PMFA) or the Municipal Finance Management Act (MFMA) -- the MFMA in the realm of local government and the PFMA in the realm of other government institutions -- one would find that the role of the Accountant-General was dealing with the applicability of the norms and standards both in municipalities as well as in government institutions. This was important in the sense that what the PAM Act did was to limit the minimum norms and standards, where the OSC had to focus only on administrative norms and standards which were applicable to public administration in the areas that the DG had already presented on.

The instrument that the DPSA had designed in terms of the organisational functionality index had two levels. The one level was for the external control points reporting to Parliament -- to Cabinet, the Accountant General, or the Presidency -- for the purpose of governance oversight.  At the micro level was the public management part. However, since 1994 there had been an over-emphasis on public management and an under-emphasis of public governance, so a problem had been identified. What the instrument was doing was making sure that there was accountability for all aspects of public governance, and this had to be measured in terms of the public management perspectives, involving inspections, measuring efficiency in relation to costs, and developing ratios to ensure the desired impacts were being achieved.

Ms Clarke said the DPSA had included the aspects of the inspection in the draft regulations that covered the particular power and authority to deal with inspections. The Department had seen that internationally, if there were 100 organisations, 20% of them were usually performing way above where they were expected to be performing, 60% were meeting the compliance standards, and 20% were not meeting the standards. This indicated that the inspections should focus on those 20% of departments and institutions that may not be meeting the compliance levels. This was important because the inspections would come only after a compliance order had been issued, meaning that a development plan and a response plan had been already been given and not been responded to, so there had to be an inspection.

The early warning signs for the decision to go and intervene in a department or in a municipality would be based on a scientific methodology to determine that the intervention had to take place. The importance of the monitoring and evaluation was to ensure that what needed to be done had been done, which meant that there was a legal obligation to report. There also had to be improvement, meaning that the process was for developmental purposes, so there had to be a balance between what the findings were and the training and capacity required to fulfil the development requirements.

Recommended candidate for appointment as PSC Commissioner

The Chairperson went through the Committee’s report on the recommended candidate for appointment by the President to serve as a Commissioner for the national Public Service Commission, page by page.

The report was adopted.

Consideration of Minutes

The Committee minutes of 18 September, 8 October, 9 October, 15 October, 16 October, 23 October, 6 November, 13 November and 19 November were considered and adopted. 

The meeting was adjourned.

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